Synergy Blog

MSPRC Issues Alert that it is Temporarily Suspending Issuance of Rights and Responsibilities Letters as well as Demand Letters

By Jason D. Lazarus, J.D., LL.M., MSCC, CSSC

The MSPRC recently issued the following alert:

Alert: Issuance of the Rights and Responsibilities (RAR) and Demand letters has been temporarily suspended

Issuance of the Rights and Responsibilities (“RAR”) and Demand letters has been temporarily suspended while these letters are under review. The MSPRC is still working cases, and the RAR and Demand letters will be mailed out once appropriate revisions have been made.

The MSPRC is still working on resolving conditional payments, this is just a hold on issuing the RAR and demand letters.  From what I have been informed, this is related to the Haro v. Sebelius decision out of a Federal District Court in Arizona.  In Haro v. Sebelius, a class of plaintiffs who are Medicare beneficiaries are challenging certain collection practices and procedures employed by the Secretary of the United States Department of Health and Human Services as implemented by CMS.  Specifically, the United States District Court in Arizona was asked to determine two things.  First, can CMS “require prepayment of a MSP reimbursement claim before the correct amount is administratively determined where the beneficiary either appeals or seeks a waiver of the MSP reimbursement claim”?  Second, can CMS “hold plaintiffs-attorneys financially responsible for MSP reimbursement if they do not hold or immediately turn over to Medicare their clients’ injury compensation awards”?  The court answered both questions in a recent order enjoining Medicare.

The order enjoined [Medicare] from demanding payment of a MSP reimbursement claim [within 60 days of notice of settlement] with threats of commencing [immediate] collection actions before there is a resolution of an appeal or waiver request.”  In explaining its reasoning for enjoining Medicare the Haro court stated that “the Secretary’s application of the 60-day reimbursement requirement to support immediate collection activities against beneficiaries when the reimbursement claim is in dispute is neither rational nor consistent with the statutory scheme providing for waiver and appeal rights.”  If Medicare’s interpretation of the MSP asserted in this case was accepted, the United States District Court of Arizona held it would unnecessarily chill “a beneficiary’s right to seek a waiver or to dispute the reimbursement claim and reaches beyond the fiscal objectives and policies behind the 60-day reimbursement provision.”  Keep in mind interest though as the court recognized and approved imposition of 11.375% per annum interest applied retroactively to the date of settlement on amounts due to Medicare.  It found that “[t]he MSP provision that interest will accrue from the notice of the settlement, 42 U.S.C. § 1395y(b)(2)(B)(ii), upon the final determination of a disputed claim, 45 C.F.R. § 30.18(h)(1), is strong incentive for beneficiaries to pay what they owe Medicare prior to expiration of the 60-day time period, leaving only the disputed portion of the claim unpaid.”

In addition, the Court specifically rejected Medicare’s policy of demanding “that attorneys withhold liability proceeds from clients pending payment of amounts claimed by [Medicare] as MSP reimbursement exceeds [the Secretary’s] authority under the Medicare statute, and [Medicare] is enjoined from demanding that attorneys withhold liability proceeds from their clients pending payment of disputed MSP reimbursement claims.”  It is important to note that the Court did not enjoin Medicare from recovering unpaid amounts from attorneys.

To read more about the Haro decision click HERE

To visit the MSPRC’s website, click HERE

If you have questions or need help with Medicare conditional payment issues, don’t hesitate to contact Synergy’s lien resolution company, Lien Settlement Solutions.  Lien Settlement Solutions provides flat fee based lien resolution services for Medicare conditional payments allowing you to outsource this task and pass along the costs to the client in most states and per revised Florida bar rule 4-1.5.

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